LibraryScenariosWhen monetary policy success creates unsustainable dependencies
Scenario

When monetary policy success creates unsustainable dependencies

I see the data showing that our low rates are fueling a everything bubble, but raising them now would crash markets and destroy pension funds, so we are trapped in our own policy success.

Zera
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More people experience this than they realize.

What we've seen

The unintended consequences of effective policy interventions can create lock-in effects that eliminate future policy flexibility.

Ideas that help explain it
Worth thinking about

“Where Are You with Central banks and monetary policy?”

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